Management Briefing

Sustainability in Wine - Part II: Corporate Leadership

Most popular

Advice for brewers in the time of COVID-19

Mangrove MD warns of coronavirus impact on spirits

Over the influence? The future of social media

Coronavirus special - US Distilled Spirits Council

Provenance and quality not enough for spirits - II


Part two of this four-part management briefing on environmental sustainability in the wine sector looks at how the larger players play their part.

Notwithstanding the fragmented structure of the wine sector relative to other beverage categories, there are some notable large players which have shown leadership with regard to environmental sustainability in much the same way as the major brewers and distillers have done.  

As highlighted in the opening section of this briefing, the other defining distinction between wine and the other drinks sectors is the closeness between its agricultural supply chain and the processing operations. Among many smaller and medium-sized operations, these functions are carried out by the same entities.

Indeed, this can be seen among the largest companies in the sector, most of which own and farm vineyards, even if they contribute a relatively small proportion of their total volume. Even Diageo and Pernod Ricard, which both include wine operations in their overall portfolio - albeit somewhat dwarfed by their spirits brands - own vineyards.

Imagining a major multinational beer group or spirits producer growing wheat or barley, one begins to appreciate just how different wine is in terms of empathy with its agricultural suppliers. As Michael Othites, senior VP production management at Constellation Brands, puts it: "We can't ask our growers to do anything that we're not willing to do ourselves. We have this feeling that we have to be on the cutting edge; we have to be innovative."

Olivia Tyler, group manager corporate social responsibility and vintrepreneur at Treasury Wine Estates (TWE), adds: "We are land managers and an agricultural company as much as we are a manufacturer or a branded company. Sustainable farming is one of our key areas of focus."

Until it sold off its European and Australian wine operations last year, Constellation Brands was the world's largest wine company. Today, it is the second largest behind E&J Gallo. It lays claim to being the leading premium wine producer in the world, the leading premium wine company in the US, and the biggest wine company in both Canada and New Zealand. It is also a supplier of beers and spirits.

As a public company, Constellation's approach to environmental sustainability and disclosure around its environmental impacts is similar to the major distillers and brewers discussed in the previous briefings in this series.

Underlining the variation in water use across different wineries outlined in the previous chapter, Othites says the company takes a "site-by-site" approach to managing water efficiency, not least as the facilities vary enormously in how much fruit they process, but each of its wine production units has its own water conservation programme.

Diageo would probably be considered a larger player on the wine side if it were not for the fact that its wine business is a relatively small proportion of its overall turnover. However, Michael Alexander, head of environment communications & policy at Diageo, states that the company has given the same targets on water, energy and waste to its wineries as it has to its distilleries and breweries. However, it does not break down the progress by sector.

In much the same way, Pernod Ricard's wine operations are small in comparison with its spirits activities, yet more extensive than Diageo's. Possibly because it is a French company, it gives a rather higher profile to wine than Diageo, though ironically apart from Champagne its wine production sites are all outside France.  

As part of its undertakings around sustainable agriculture and the protection of biodiversity, Pernod Ricard has committed to have 80% of its 6,100 hectares of vineyards certified to environmental standards by 2012. In its most recent corporate responsibility report, it stated that it had so far reached 77%.

In New Zealand, for example, all the vineyards run by its Brancott Estate subsidiary are certified under the 'Sustainable Wine Growing New Zealand' scheme, of which Pernod Ricard was a founding member. Meanwhile, in Australia Orlando Wines is a member of 'EntWine Australia', an environmental assurance programme for vineyards and wineries. 

As shown by the BIER research quoted in the first section of this briefing, wine has a relatively low water use ratio in comparison with beer and spirits and, according to Diageo, greenhouse gas emissions are typically around 50% lower for wineries than for breweries. Nevertheless, wine companies have been enthusiastic adopters of renewable energy.

For example, Constellation Brands states that as much as 44% of its energy usage comes from renewable sources, although this includes 36% renewable energy usage included in the grid supply. That said, the company has some notable in-plant renewable energy generation. 

A solar initiative that includes 17,000 solar panels at four wineries gives the company the largest solar footprint in the US wine industry, Constellation claims. Meanwhile, at its Jackson Triggs and Inniskillin wineries in Canada, the company has partnered locally with Vandermeer Greenhouses to convert grape skins into green electricity. Constellation's Woodbridge Winery operates an anaerobic digester to generate biogas, and the company has participated in the Carbon Disclosure Project (CDP) since 2009.

Olivia Tyler states that resource efficiency around water, energy and carbon are the primary sustainability priorities for TWE when looking purely at its manufacturing sites. Solar power is also a key energy contributor at TWE, with the introduction of solar power at its Napa wineries reducing per-unit-case carbon emissions by 50%, Tyler states. In its US wine business, TWE has set a target of improving water and energy efficiency by 30% by 30 June 2014 against a July 2011 baseline.

Meanwhile, Michael Alexander highlights the use of solar power in Diageo's California wine business as a notable environmental initiative within the group's wine operations.

Lightweighting bottles is another area where wine companies are making important strides, with Constellation, Diageo and Pernod Ricard all reporting the introduction of lighter wine bottles over the last couple of years.

"For over two years, we have worked closely with our glass suppliers to redesign existing private and stock mould bottles," Michael Othites tells just-drinks. "We have converted over 200m bottles to lightweight glass."

All of Constellation's operations, comprising wine production sites in Canada, the US, New Zealand and Italy, have "active and vigorous" lightweighting programmes, Othites continues, which to date have reduced the weight of its wine bottles by 8% globally, total glass used by 23,800 tonnes per year and carbon emissions by 21,700 tonnes annually. Othites also stresses the sustainability benefits of Constellation's growing sales of wine in other packaging formats, notably tetrapak and bag-in-box.

Meanwhile, Diageo reduced the weight of its Blossom Hill wine bottle by 25g last year and, in its most recent corporate responsibility report, Pernod Ricard references lightweighting initiatives at its Orlando Wines, Mumm Perrier-Jouët, Domecq Bodegas and Mumm Napa wine operations.

Tod Christenson, director of the Beverage Industry Environmental Roundtable (BIER), highlights eco design in packaging and consumer recycling of packaging as areas where there could be fruitful dialogue and possible cooperation between the wine sector and the other beverage sectors. 

So far, with the exception of Pernod Ricard and Diageo (which are present more by dint of their leadership in the spirits market), wine is not represented in BIER, even though this cross-stakeholder group includes the largest players from the spirits, beer and soft drinks sectors. However, as the following sections of this briefing reveal there is no shortage of collective engagement on sustainability within the wine industry.

To return to part one of this briefing, click here. Part three can be found here. For the full table of contents, click here.

Related Content

"In sustainability, innovation could make a big gain" - just-drinks speaks to Anheuser-Busch InBev C...

Why drinks brands must move beyond comfortable consensus on climate change - Sustainability Spotlight

Why drinks brands must move beyond comfortable consensus on climate change - Sustainability Spotligh...

How weaving sustainability into your business model will generate value - Sustainability Spotlight

How weaving sustainability into your business model will generate value - Sustainability Spotlight...

Can marketing turn beverage consumers into unconscious environmentalists? - Sustainability Spotlight

Can marketing turn beverage consumers into unconscious environmentalists? - Sustainability Spotlight...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..

Forgot your password?